urban-gro, Inc.

Hello and welcome to the Urban Grow 2021 Fourth Quarter Earnings Conference Call. As a brief reminder, all participants are currently in a listen-only mode. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. Following the presentation, there will be a question and answer session for those on the teleconference line. Please note that this conference call is being recorded and a replay will be made available on the company's website following the end of the call. At this time, I'd like to turn the conference call over to Dan Droehler, Executive Vice President of Corporate Development and Investor Relations at UrbanGrow. Sir, please go ahead.

Good afternoon, and thank you for joining us. Today's call will be led by Brad Mattress, Chairman and Chief Executive Officer, and Dick Aykroyd, Chief Financial Officer. Following our prepared remarks, we will open up the call to questions for those on the teleconference line. I'd like to remind our listeners that remarks made during this call will include discussion of non-GAAP metrics, including adjusted EBITDA and backlog. These items should not be utilized as a substitute for UrbanGrowth's financial results prepared in accordance with GAAP. Reconciliations of our adjusted EBITDA to GAAP net income or loss is available in our press release and in our form 10-K filed with the SEC and can be accessed from the investor relations section of our website. On this call, We may state management's intentions, beliefs, expectations, or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on UrbanGro's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports UrbanGrow files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Lastly, a copy of our earnings press release may be found on the Investor Relations section of our website at ir.urban-grow.com. In addition, a webcast replay for today's call will be available on the events section of our IRR site. With that, I would now like to turn the call over to Brad, Chairman and CEO.

Thank you, Dan. Good afternoon, everyone, and welcome. On today's call, we'll cover several topics. I'll begin by providing an overview of our business, including an update on our results, execution and vision, as well as share some highlights from the first quarter of 2022. Nick will then review our financial results in more detail before opening the call for your questions. 2021 was most definitely a transformative year for urban growth in so many ways. Starting with our uplisting to NASDAQ in February and tied to the $62 million equity raise, it provided us with the necessary resources to not only more rapidly build out our existing capabilities, but moreover, to start working on our vision of providing a global indoor controlled environment egg market with a complete turnkey design build solution, all supported by a suite of in-house services. Our acquisition of the award-winning architect firms 2WR and MJ12 in July of 21 was a very important step. We not only expanded our services offering to include architecture and interior design services, we added capabilities to expand our offering from just cultivation facilities to also include retail dispensaries as well as extraction and processing facilities. Further, the integration of our services and equipment offering into MJ-12's pipeline proved to be highly advantageous and has driven strong waterfall revenues for the company. Further building upon these increased capabilities, earlier this month we announced the pending acquisition of Colorado-based Emerald Construction Management. This transaction will not only add construction management services to our offering, but it will also complete the combined skill set that allows us to deliver on our end-to-end full facility vision. We see the rapidly growing market for turnkey indoor midsize controlled environment ed facilities as underserved. With this acquisition, Urban Grow will be the only company servicing this segment that possesses all turnkey services, equipment integration, and design-build solutions in-house. And we don't stop there. For operating facilities, we continue to focus on building out our managed services offering, branded GrowCare, the highly advantageous recurring revenue model that utilizes our in-house knowledge base to provide operators with the expertise to assist them with training, on-site and remote troubleshooting, remote monitoring, and ongoing maintenance programs the strength behind both the managed services offering and the company as a whole is our people we're fundamentally a high touch service oriented company comprised of an extremely deep bench of experts post acquisition we'll have over 125 employees of which approximately two-thirds are architects a variety of types of engineers cultivation designers remote and on-site project managers and superintendents, and horticulturists and plant scientists with a strong history of growing multiple crop types. It's clear these experts are UrbanGrowth's strongest ISP, and it's the holistic integration of these skill sets and the expertise acquired from working on more than 500 projects that provides immense value to our clients and defines our competitive advantage. We have capabilities to tackle projects globally and bring our clients best-in-class services to maximize their investment and achieve their cultivation goals. From a financial perspective, 2021 showed solid growth. We achieved revenues of just over $62 million, which represents growth of 140% versus 2020. We generated positive adjusted EBITDA of approximately $2.7 million, which represents an increase of $3.3 million versus 2020. And further, as of December 31st, 21, our backlog was just over $30 million. Our cash position was just under $35 million, and we had zero debt. These results tie directly back to the fundamental building blocks that we've put in place. all of which focus on continually delivering elite service levels to our clients. We take a plant-focused, end-to-end approach and provide our clients with a single point of responsibility across all aspects of their operations. This is not only Urban Group's value proposition, it's been the foundation of our success to date, which includes delivering such strong growth amid a fluid operating environment and changing industry dynamics. Bottom line, Client's capital is precious, but their time is invaluable, and it's imperative that we maximize both for their benefit. From a growth perspective, we're focused on three key areas. First, geographic expansion. Second, expansion within the controlled environment and sector. And third, continued expansion of our service capabilities. First, geographic expansion. We continue to execute on opportunities in our core cannabis and food-focused vertical farming markets and are making solid progress with our expansion into the EMEA region. Our ability to capture a greater share of these markets is based upon establishing a strong foundation to support our service platform and leverage it to new geographies. Signing commercial agent partnerships and meeting new clients at trade shows, they continue to drive business in these new regions. In fact, on this point, in the last two months, we've participated in trade shows in Dubai, Spain, and also Israel, and we have many more planned for the remainder of the year. I'm pleased with the team's progress, building a strong pipeline to ensure that we continue to expand our reach. Our secondary focus is expansion within the controlled environment ag sector to also include vertical farming. We have immense capabilities to service the indoor food focus sector and see strong momentum in both North American and European markets. In addition to signing 20 project contracts with 10 vertical farming operators in the North American market since the start of 2021, our marquee project with Urban Health Farms in Europe is poised to launch in the coming months as they complete their site selection process. Again, our exclusive engagement provides for urban growth to deliver up to 20 of these complete turnkey facilities, providing full architect-led design-build solutions. The third and final area of growth includes diversification of our service capabilities. With the addition of 2WR and the pending acquisition of Emerald's construction management services and design-build capabilities, will not only possess a complete set of capabilities for the global indoor CEA market, but will also have the good fortune of further diversifying our revenues through their existing presence in non-CEA markets as well. While we remain a CEA-focused organization, our complete set of in-house capabilities allows us to continue to offer world-class service to other sectors in which these acquisitions operate. includes hospitality, K-12 education, healthcare, and retail and food service distribution as well. Before passing the call over to Dick for his financial review, I'd like to share some exciting highlights from our performance in this first quarter of 2022. We have signed approximately 50 new service contracts for our architecture, engineering, or cultivation design services, some of which are full turnkey, inclusive of all services offered. Of this number, four are within the food-focused vertical farming sector. We've signed approximately 60 new cultivation equipment contracts in the quarter and demonstrating our strength in accessing new legal cannabis markets as they open. We've signed five project contracts so far in Georgia and Mississippi. From a supply chain standpoint, we continue to expand our global manufacturer partner network to find five new supplier agreements. And finally, we continue to focus on building out a world-class team and adding expertise where applicable. We hired JT Archer in Q1 as our new chief of staff, reporting direct to the president and COO. For the three years prior to joining UrbanGrowth, JT worked for a U.S.-based MSO and was responsible for managing the design build of seven facilities as well as a dispensary. His skill set is definitely proving to be invaluable with the launch of our design build offering. Again, all of these aforementioned successes are from signed business since the start of 2022 and definitely show that momentum continues to build for our company. In closing, I'm ecstatic with the team we've built, the full set of capabilities that we are bringing to our clients, and how this is all translating to our continued growth and momentum. The future remains extremely bright for UrbanGrowth, and I look forward to sharing many more accomplishments with you in the quarters ahead. With that, I'll now turn the call over to Dick.